ABBOTT POINT IS HISTORY

Worst news for Australia as India taps solar, Beijing bans coal

In Delhi last week, the Indian government committed to a plan to provide low-cost loans and grants to set up some of the world’s largest solar PV parks across the country, each of them comprising as much as 20 gigawatts of capacity, about 10 times what India has built to date.At a cost about 32 per cent below the global average for solar, according to data compiled by Bloomberg, and well below the average for coal-fired power generation.

China &  India have become increasingly critical to the stability or continued growth of the seaborne coal market.Add to this India’s five-year solar lighting goal and you have what looks like a much diminished future coal equation for Australia.

According to official Chinese government statistics, coal use accounted for 25.4 per cent of the capital’s energy consumption in 2012 – a figure that is expected to shrink to less than 10 per cent by 2017.

China’s plans to slash its already declining coal use poses a major – but certainly not unheralded – problem for Australia’s coal industry.According to data from Newcastle’s Port Waratah Coal Services, China has accounted for just over 25 per cent of coal through the Port of Newcastle, the world’s biggest coal export hub in 2014.On top of this, the price for thermal coal has plunged more than 10 per cent in the last two months – due largely to major importing nations like India making it clear that renewable energy is offering a competitive energy alternative.

Currently, thermal coal is sold for less than $70 on the spot market, well below the mark for Australian producers to make money, let alone the cost of production and the level to get the finance for the massive new projects Prime Minister Tony Abbott is hoping to encourage.

Any chance of a boom as China grows may prove ephemeral.”